Cheaper Protection for Portfolios

Try these less expensive alternatives to put options to hedge against stock declines.

The CBOE Volatility Index (VIX) is low and moving lower, often a bullish sign. Market participants may talk about being worried, but their actions show them to be complacent. Few traders are stocking up on put options to protect against a decline in stock prices. The U.S. equity market has been moving higher for more than four years, with occasional declines to break the monotony.

Stock-market experts can be found to support your bullish or bearish outlook. You can find someone (whom you can blame later) to encourage you...